Due diligence a prerequisite
‘Great people to fly with’ remains its slogan. But unlike the 1960s through to the late 1980s and a few years thence, its excellence reflected the superlative Omar Kureishi copy. Or why would it have been approached by 30-odd airlines to make them learn to take flight? The irreversible rot started setting in – like so many other spheres of life – the Zia era in the early 1980s when Jamaat-e-Islami’s cadre was placed in the airline. The spate of political appointments did not stop since, with the PPP, PML and MQM too stuffing their workers PIA, Railways and Karachi Steel Mills – to name three of the three-score plus state-owned enterprises (SOEs). Though the malaise of the PIA is more pronounced, most SOEs are similarly positioned: altogether bleeding public exchequer by Rs500 billion annually – nearly one-fourth of the entire revenue through taxation.
While ordering to divest 26 per cent of the government’s holdings in PIA along with management transfer, the prime minister said, a loss of Rs3.3 billion every month was impossible to suffer. His recipe: involve the private sector to redeem the airline. The two major opposition parties, the PPP and the PTI, have vowed to oppose the move. While all sorts of views would find some support from one quarter or another, the opposition needs to act more maturely than in the past, and should either draft its own blueprint for PIA and other SOEs or let the government do its job. For its part, particularly with the economy in such abysmal shape and the IMF breathing down its neck, the government is not really spoiled for choices. It’s options are narrowed down to just two: Major SOEs incurring heavy losses – power generation and distribution companies, the Railways, the PSM and the PSO – either have to be restructured and turned into efficient and profitable ventures or they have to go under the hammer.
That said, there are countries where public sector utilities are being managed in cost-efficient manner under state control by professional managers. Across the border, in India the Railways and the Delhi Metro are gigantic units providing superb service, employment and excellent financial returns. It would be ideal to turn around the loss making giants into profitable entities, but with the poor quality of available human resource and the inevitable political meddling being a given, this seems no longer possible in our neck of the woods. That being the unfortunate situation, it is best to privatise but not in the manner of the 1990s when the PML-N is said to have given away sizable parts of what is tantamount to family silver for a song. Due diligence before each deal is sealed, signed and delivered must be observed – and also be clearly visible to all. That is only way it can ensure that the SOEs are actually turned around, and, as in the case of KESC, do not continue to remain an albatross around its neck.